The PJM campus was closed to visitors – and most employees – for the bulk of 2020, but work was anything but idle, as PJM engaged stakeholders remotely on issues including improving the interconnection process, furthering states’ energy goals, reforming the capacity market and enabling a grid transformation while maintaining reliability.
Susan Buehler, Chief Communications Officer, led the Year in Review panel Monday at PJM’s Annual Meeting, held virtually for the second year due to the coronavirus pandemic.
Joining her were:
- Stu Bresler, Senior Vice President – Market Services
- Mike Bryson, Senior Vice President – Operations
- Ken Seiler, Vice President – Planning
- Joseph Bowring, President of Monitoring Analytics, the independent market monitor
The pandemic affected all aspects of PJM and the work it does, from switching to a remote work posture for 90 percent of employees to finding new ways to forecast load, Bryson said.
Bryson credited consistent communication between PJM and members, especially at the onset of the crisis last spring, with successfully maintaining a resilient and reliable grid – even as extreme weather, coronavirus restrictions and social unrest presented challenges on the ground.
One of the most noticeable impacts was a reduction in load.
Beginning in late March, power demand dropped, with the deepest dip occurring in the first half of May. Load picked up in the summer, went down again in the fall, and began to normalize in the winter.
Bowring noted that locational marginal prices hit the lowest levels in the history of the markets last year. This year, he said, both demand and prices are up thus far.
Markets in Flux
Markets and pricing were a hotbed of activity in 2020, with PJM reforming both fast-start and reserve pricing and getting the go-ahead from the Federal Energy Regulatory Commission to hold the first capacity market auction in three years.
“It really is a very important component of our capacity market to be able to conduct these auctions on a forward basis – in particular, a three-year-forward basis,” Bresler said. Doing so helps ensure all resources – planned and existing – have an ability to compete on a level field, he said.
This month, PJM will conduct its next annual Base Residual Auction, for Delivery Year 2022/2023, and continue the auctions on a compressed schedule until back on track in May 2024.
Bowring echoed the necessity of getting the auctions back on a regular timetable.
Looming large in that discussion is the Minimum Offer Price Rule established by FERC, which Bresler said is not a durable, sustainable solution.
While states are seeking to retain or stimulate development of resources to meet their policy objectives, the MOPR does not recognize these choices, Bresler said.
PJM and stakeholders have started an accelerated discussion process to devise changes that would be filed with FERC in July, in time for the Delivery Year 2023/2024 auction, to take place in December.
Interconnection Process Overhaul
At the heart of enabling the transition to the future grid is balancing how to incorporate a fast-growing number of intermittent resources with maintaining reliability, Seiler said.
“The volume is incredible,” Seiler said of the number of projects requesting interconnection. Last year, PJM conducted an all-time record of 1,400 interconnection studies – more than the previous three years combined, Seiler said.
Over the past 20 years, PJM has interconnected over 70,000 MW of generation. “However, we’re seeing a completely different fuel mix,” Seiler said, made up of smaller units distributed throughout the footprint. Right now, there are 2,000 active projects – mostly wind, solar and hybrid with storage.
In order to improve the process, PJM is working with stakeholders to find ways to shorten the time projects remain in the queue, improve cost certainty and otherwise address concerns.
Seiler warned, however, that simplifying and speeding up the process also probably will mean a reduction in some flexibility currently afforded to the interconnection customer, such as being able to suspend a project up to three years.
Seiler cited as a positive development the creation of a dedicated State Policy Solutions Group, designed to leverage PJM’s expertise in planning, operations and markets to help states implement their energy policies.
In November, PJM and the New Jersey Board of Public Utilities partnered on an effort to use a Tariff provision to enable PJM to solicit 7,500 MW of offshore wind projects.
Focus of 2021?
Panelists also weighed in on what they’re focusing on in 2021.
Bryson said he will be studying a winterization standard for generators forthcoming from the North American Electric Reliability Corporation.
It will carry an 18-month implementation plan, but Bryson encouraged member companies to move toward the recommendations from the report much sooner.
For Bresler, the year will be filled with capacity market reform, working with states to find competitive ways to pursue their clean energy policies and implementing FERC Order 2222 to enhance market participation of distributed energy resources.
Bowring said he hoped PJM would continue to pursue reliability through the competitive market.
Seiler’s attention is on integrating offshore wind and finding reliable ways for emerging technologies to contribute to the grid.
“We’re at a significant crossroads with any number of changes,” he said. “It’s a very exciting time to be part of the industry.”